𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

When Ed Miliband sadly passes away he will be found to have the words “£300 a year off your energy bills” engraved on his heart. That was the promise he made, you may remember, during the last election campaign. It is not looking too clever a promise at the moment. Ofgem announced this week that its energy price cap will be increased by 13% from July, to the point at which the average household will be paying an extra £220 a year.

Rachel Reeves did her best to help her colleague, the energy secretary, in her last Budget, when she announced that a string of green levies will be taken off energy bills and added instead to general taxation, but the effect of that has now been more than wiped out. Miliband now has next to no chance of making good his promise on bills.

Of course, the immediate cause of the increase in the price cap is the war in Iran, which has led to the closure of the Straits of Hormuz and the temporary loss of 20% of the world’s supply of oil and gas. Miliband has used the Iran war as justification for going even harder and faster on net zero. Still, he refuses to countenance issuing licences for new oil and gas extraction in the North Sea, in spite of many colleagues, and even RenewableUK, the trade body for the wind and solar industries, imploring him to do so.

This is despite him knowing full well the consequences of prematurely running down the North Sea – that we are becoming more, not less, dependent on the ‘fossil fuel dictators’ he says he wants to free us from.

Miliband seems to have little insight as to why Britain, which has embraced wind and solar more enthusiastically than just about any other major Western economy, has ended up with the highest industrial electricity prices, as well as the second highest domestic prices, of any major economy analysed by the International Energy Agency. He keeps on trying to assert that wind and solar will one day bring down our bills.

But that is no more than wishful thinking. It is true that the marginal cost of generating power from wind and solar is low because they don’t consume fuel. But constructing wind and solar farms comes with hefty upfront capital investment costs.

When interest rates were on the floor it was relatively cheap to build them, but as soon as rates increased above 300-year lows the cost of renewables soared. Wind and solar farms are only getting built now because the government nearly trebled the long-term, index-linked guaranteed prices it is prepared to pay (or rather it is us who are paying, and the government making the decision for us).

Moreover, to run an electricity grid on intermittent wind and solar requires huge backup or energy storage. Storing energy, however, is fantastically expensive; it costs nearly three times as much to store a kilowatt-hour of electricity in a lithium ion battery as it costs to generate it in the first place. As a result, at the moment we are resorting more to using gas power as a backup. But this, too, is far more expensive than if we were using the gas plants all the time: a power station still has to be maintained and its capital investment repaid if it is being used for only a few hours a week.

Then there is the problem of what we do on sunny and windy days when wind and solar farms can generate more power than we can consume. At the moment consumers are paying several hundred million pounds a year in ‘constraint payments’ – compensation for wind farm owners to turn off their turbines.

Energy and climate policy at the moment lacks logic or even plain commonsense. This week the Conservatives said they would reverse a de facto ban on air conditioning in new homes (a ban which they themselves introduced). It is utterly absurd that we have a government warning us that more of us will die in heatwaves as summer temperatures increase – but which is preventing us from having a measure which could make a big difference to our comfort during heatwaves.

Miliband and his advisers don’t want us to have air conditioning because they say it consumes too much energy and will make it more difficult to meet our net zero commitments. Yet air conditioning consumes most energy on sunny days when the output from solar farms is at its maximum and demand for electricity for other purposes is low. So why the bizarre prohibition on air conditioning? Without it, we will end up paying to compensate solar farm owners to turn off their panels.

One day, Britain’s net zero policies are going to collapse under the weight of their own contradictions and lunacies. We will eventually be forced into adopting policies which don’t kill off our remaining industries, which recognise cheap energy as essential for a healthy economy and decent living standards. Sadly, however, it is not going to happen so long as we have a zealot like Miliband at the helm of our energy policy.